Nordic Armaments Co-operation Savings Potential

Abstract

Abstract The purpose of this paper is to estimate the potential cost savings of Nordic defence co-operation, which is frequently given as one of the arguments in its favour by politicians. Theoretical grounds for savings in co-operation such as economies of scale are reviewed in both the business and defence contexts. Then the potential cost savings in the future acquisition plans are studied through comparing countries’ plans and in maintenance through assessing the commonality of current military equipment. Comparison of public defence purchasing plans reveals that the opportunities for procurement co-operation are limited as Nordic countries are planning to acquire mainly different equipment. Due to differences in current military equipment, the savings opportunities in maintenance are likewise limited other than in the land vehicles’ sector. As currently practiced, Nordic defence co-operation seems not to offer any savings potential that could make a difference at the overall military budget level. The independent assessment of this article is based on publicly available data, which limits both the scope and details of the results.